Drop in home prices, sales don't deter Realtors

Springfield-area Realtors, like those in other parts of the country, are disappointed in the state of the housing economy, yet they also remain "cautiously optimistic" about what the future holds.

Springfield-area home sales in 2008 fell to around 6,100, down 18.5 percent from the 7,465 homes sold in 2007. The average 2008 home sale price was $139,250, down 5.7 percent from 2007, according to data from the Greater Springfield Board of Realtors, which has a service area concentrated in Greene, Christian and Webster counties.

"We're disappointed, but we're trying as an industry to remain positive and do everything we can (to come out of it)," said Miles Noennig, chief administrative officer of Carol Jones, Realtors and president of the Greater Springfield Board of Realtors. "We like to think housing is in a correction right now and not a collapse; there has been a significant adjustment in the last couple of years, and we hope that stabilizes at some point this year."

Nationwide, home sales in 2008 were down 13.1 percent to 4.9 million, and the average U.S. home price dropped 9.5 percent to $198,100, according to the National Association of Realtors.

Art Maxwell, sales manager for Coldwell Banker Vanguard Realtors, said the Springfield market is in comparatively good shape. Maxwell has seen a real market crash - he came to Springfield in 2006 from Southern California, where home prices have experienced a double digit percentage decline each year for the last several years.

"Since five years ago, the (U.S.) market has greatly reduced in activity, but a lot of that was because prices increased to an unrealistic point," Maxwell said. "What's going on here is a normal correction from a super-hot market, which would have happened anyway."

Maxwell pointed out that local home loans made in recent years carried less risk than those in higher-priced markets, such as California and Florida, where people who wanted to borrow money to buy expensive homes likely had to borrow from a broker, who gets funding from private investors willing to take more risks.

"A normal bank doesn't make loans for $450,000 that are risky. Because we had a lot of local banks lending here, they didn't take on as much risk as others," he said, noting that the local market has been affected by the impact of Fannie Mae and Freddie Mac buying those high-priced loans and getting stuck with the risk.

Realtor Luke Glover also thinks the market is in decent shape, though he thinks it will improve during the year. Glover is fairly new to the real estate business, having joined Keller Williams Realty in Springfield late last year.

One of Glover's listings, at 1679 E. Belmont St., is priced at $139,900, near the market average. He said that home drew some interest, though it's being pulled from the market temporarily for some improvements.

"I've had a lot of people looking at it, and I have a customer right now trying to get qualified for it," Glover said. "I'm new to the business, so I wasn't in business when things were really good, but for me, it seems to be all right. Things are a little slow, but it's not like home sales have completely stopped."

In general, homes aren't taking longer to sell, either, according to Noennig. The average home in the GSBOR coverage area sits on the market for about 76 days, a number that has held steady for more than a year.

Parts of southwest Missouri, however, have seen the average home sit for 120 days or more, according to GSBOR's Economic and Market Watch Report for the fourth quarter of 2008. In Polk County, the average time for a home on the market is 123 days, and in Webster County, it's 118 days.

Sluggish sales are part of the reason that GSBOR membership is around 2,000, down about 15 percent from its peak.

"There has been less business the last couple of years, and the number of transactions per agent has declined," Noennig said. "It's a business, and sometimes there is not enough production to satisfy people's goals or needs, so some people just choose to change careers."

He is confident, however, that the market will soon begin its expected turnaround, especially due to the numerous efforts from the federal government to boost real estate. (See related story on page 11.)

Maxwell, too, thinks the bottom is near.

"Prices don't look like they're going to fall much more, so good investors are starting to buy," he said.

Noennig said that while local Realtor numbers are down overall, the number of new agents is picking up again, which he sees as another positive sign.

"Housing is a great investment, and prices right now are very affordable," he said. "Credit has tightened, but if you have a good credit record there is money out there to be lent. Our industry is built on optimism, and right now we're cautiously optimistic."[[In-content Ad]]